Buyer Learning Session: How to Talk to Your Suppliers About the Value of Joining the Ariba Network

Alexander Graff, Head of Corporate Business, Schweitzer Fachinformationen
Martin Meyer, Head of Business Strategy, Bechtle
Austin Whitehead, Senior Director of Solutions Marketing, Seller Solutions, SAP Ariba (SAP)
June 14, 2016
How to Talk to Your Suppliers about the Value of
Joining the Ariba Network
Public

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 2Public
Presenters
Alexander Graff
Head of Corporate Business,
Schweitzer Fachinformationen
Martin Meyer
Head of Business Strategy,
Bechtle
Austin Whitehead
Senior Director of Solutions Marketing, Seller Solutions
SAP Ariba (SAP)

© 2016 SAP SE or an SAP affiliate company. All rights reserved. 3Menü
Alexander Graff
3
Head of Corporate Business at Schweitzer
With the firm since 2007
>15 years in the e-procurement business
Responsible for
 Strategy and service portfolio in the corporate market
 E-procurement strategy
 Marketing and sales program
 Schweitzer’s business network

About us
4
“Medium sized”
Founded 1868
600 staff
€ 200 million
30 million items in the catalog
50,000 suppliers
Three key services/tools
 Buy, manage, and use
Clients across multiple industries
 Finance, consulting
 Chemical/pharma
 Automotive, media, manufacturing

Seller advantages
5
Business process
template
Eliminates the need
to design a specific
process just for this
one relationship
Fees reasonable
What does <1%
do to your
business anyway?
Easy to roll out
Once set up
connecting more
users/entities
within the
customer is easy
(automated?)
Plug and play
Once set up, a
new connection
to a new
customer is
fairly easy and
quick
€ $ ¥

Seller advantages
6
You are a “fit”
It is easy for the customer (procurement) to connect with you – as it is for the user
Helps you to reassess and optimize your processes
Clearly shows you what customers want and where value is added > guideline for your internal processes
It is a differentiator
How many companies do (or could) serve your customers with your product/service?
How many do through SAP Ariba solutions?

The network effect
7
How do buyers
find sellers?

The network effect
8
How will
buyers find
sellers
???

Talking about the fee
9
What about new
business?
Consider new business
(within the customer)
you might get and keep
Put in context
Compare to: EDI
connection cost
(providers), manual
processing, credit cards,
paper handling and
postage?
Is the product
worth it?
Connection simplifier,
process enabler,
marketing platform …

Another view
10
Think of it as a “must”
and imagine that your
customer will go away
otherwise
Or just imagine it was a
fixed fee road toll
What you would
you do?
Exactly, drive the road
and see where it takes
you and what value
you get …

View on Ariba platform
Con Pro
Volume-based fee (might be a con) Fees reasonable
Transparency on customer’s side (pricing, volume) Transparency on customer’s side is a “like” and allows for open
discussion
Imposed standard process Option for single sourcing and rollout
(you are the standard process)
PunchOut specific to SAP Ariba and Oracle solutions PunchOut is very stable/CIF-static catalogs also possible
(Potential) internal setup investment You can use the “asset” to generate new business and set yourself
apart from the competition
It does not automatically generate new business Base for simplified internal processes and new business model
Volume capture
11

Decision criteria
12
• What would it do to my business to lose this particular customer?
• Whom do I talk to? Procurement or special departments/positions?
• Am I “exchangeable”? What is my unique position in regards to this customer?
• Is there any more volume/potential I can reach within this customer?
• Is the “corporate market” interesting for my business? (present or future)
• Can I automate internal processes (such as entering an order into the system)?
• What does my competition do?
• Can I think of additional services I can provide on the e-procurement (platform) basis?
• How much would my investment (really) be?
• Can you and do you want to scale your business, given that some processes can be
automated, eliminated?

SAP Ariba solutions and Bechtle
A strong partnership for IT procurement
Madrid, SAP Ariba Live | June 2016 | Martin Meyer

|
Martin Meyer – Bechtle AG.
SAP Ariba Live 14
Head of e-business strategy.
Member of the supervisory board.
Joined Bechtle in 1992.
Cofounded Bechtle’s business segment “IT e-Commerce” in 1993.
Cofounded Bechtle’s customer-specific IT procurement portals (bios®) in 1998.
Areas of responsibility:
Strategical development of all bios® procurement portals.
Management of B2B Integration projects.
E-procurement trainings for employees.
June 2016

|
Bechtle AG
SAP Ariba Live 15
Bechtle Opens the Door to the Future.
The Bechtle Group has 66 system houses in Germany,
Austria, and Switzerland and is one of Europe's leading
IT e-commerce providers with trading companies in
14 countries.
Founded in 1983, the company currently employs over
7,300 people.
Bechtle is a manufacturer-independent company that
provides one-stop shopping for all the IT infrastructure and
operation needs of its more than 75,000 industrial, public
sector, and financial market customers.
Bechtle has been quoted on the stock exchange since 2000
and is listed in the TecDAX technology index since 2004.
In 2015, the company generated a revenue of approximate
€2.8 billion.
June 2016

|
Past to present
June 2016 SAP Ariba Live 16
1995
• Launch of the first
Bechtle
E-Commerce
Shop
1998
• Launch of our
procurement
platform “bios®”
• First certified
supplier for OCI
in Germany
2001
• First SAP Ariba
account
2015
• MultiOrg Structure
• > 30 accounts
• > 100 customer
relations on SAP
Ariba solutions
• > 100K orders
• > 100m EUR client
spend

|
What is bios®?
bios® (“Bechtle Information and Ordering System”) is a
tailor-made, highly customized online procurement
platform to...
Streamline, expedite, and unify IT procurement while
maintaining complete transparency.
Leverage framework agreements across the
customer’s organization.
Ensure compliance with (international)
procurement policies.
Seamlessly integrate into existing procurement
backend systems (for example, SAP Ariba solutions).
bios®
Asset
Manage-
ment
ERP Integration
Statistics /
Order Tracking
Authorisation Workflows
User Rights Management
Up-to-date Prices /
Availability Information
Manufacturer Agreements /
Licensing Agreements
Customer-specific Portfolios

|
Benefits for Bechtle as a Supplier.
Ease of use / setup / fees
Scalable, fast, and seamless integration for both sides of the business
Fair, value-based fee model, scaling with business
MultiOrg setup for further reduction of annual fees
Nontechnical / financial benefits
Short track to valuable and qualified new tenders / customers / opportunities
Streamlined, cost-effective internal processes
Full transparency on the whole lifecycle of transactions
Trusted partnership
Case studies, success stories
Early access to new SAP Ariba offerings (for example, Ariba Spot Buy)

Austin Whitehead
SAP Ariba (SAP)
Responsible for
Marketing SAP Ariba seller solutions
Market research
Seller value and messaging

Your analyze-to-pay process is your suppliers’ market-to-cash
process
ARIBA
NETWORK
CUSTOMER MANAGEMENT
SUPPLIER MANAGEMENT
PLAN SOURCE CONTRACT
PLAN BID CONTRACT
REQUISITION
CATALOG
APPROVE
SPECIFY
ORDER
FILL
INVOICE
INVOICE
PAY
CASH
ANALYZE
MARKET
How do I win more
business?
What are the new
opportunities?
How can I become more
efficient in fulfilling purchase
orders?
How can I invoice
correctly?
How can I gain visibility into
payments and remittance
information?

Value of e-commerce for suppliers
Marketing
Effectively identify and reach
target audience
Deliver qualified opportunities
Align offerings to changing
customer demands
Sales
Interact with buyers that are ready
to buy what you offer
Collaborate in real time with
customers to close business
quickly
Be the preferred supplier
with customers
IT and e-commerce
Leverage existing IT infrastructure
Grow your e-commerce channel
through the world’s largest
business commerce network
Easily accommodate customers’
rapidly-changing e-commerce
demands
Have a single point for business
collaboration across your market-
to-cash platforms and processes
Accounts receivable
and treasury
Ensure invoice accuracy and
acceptance by buyers
Track invoice and payment status
online in real time and accelerate
receivables
Quickly and easily reconcile
payments getting paid

The ugly secret about fees
As procurement professionals, it’s your job to
negotiate lowest fees, but you understand that
suppliers must apply appropriate fees for value.
The truth is, we get that no one wants to pay fees!
We are no different!
In fact, for Ariba Network…
 92% of sellers do not pay supplier membership fees.
 Among the 8% of sellers that do pay fees, the typical
annual bill is US$700 (less than average EDI bill).
 We offer value-based pricing.
 Cost savings prevent the need to pass charges
to buyers.

In fact, seller fees are standard with networks
Suppliers pay fees for collaborative commerce with their customers
Credit cards
Such as VISA, MasterCard,
Discover
Healthcare networks
Such as Aetna and
Cigna
Malls and marketplaces
Such as eBay, Amazon,
Mall of America
Dating and recruitment
networks
Such as Monster,
Match.com

No Fees = No Value
2
4
FEES VALUE=

Seller fees: traditional commerce
Retailers pay
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 25
Credit cards Consumers pay
Because
their customers expect
them to take credit cards
Why do they pay?
Because
credit cards are convenient
and efficient
Why do they pay?
Retailers and consumers pay for value they receive.
1%–3% 7% –36%
FEE FEE

Seller fees: business-to-consumer e-commerce
$1.00 minimum
Usually ~ 15% per item referral fee
Up to 45% for some items
NO
it’s important to be
where
their customers are
Seller fees
Insertion fee:
First 20–40 items free
Final value fee:
10% of total sales afterwards
$750 max
Advanced listing upgrade fee:
$0.01–$50 or more depending upon service
Supplemental service fee
Do sellers want to pay fees?
Why do they pay?
We are on the Ariba Network!
Because

Free isn’t free: look for the hidden fees
You probably already pay “fees” to transact with buyers
as
opposed
to
1
of
5 1%1% – 3% pays
Fee
seller
that the
Credit cards and
purchasing cards
25 – 50
EDI direct
connection
© 2015 SAP SE or an SAP affiliate company. All rights reserved. 27
pays
Fee
seller
that the
Basis points
Ariba supplier
membership
15 – 20
Basis points pays
Fee
seller
that the

What we are offering with your partnership
 Preferred supplier status
 Most favorable terms
 Enable Ariba Punchout catalogs
 Implement both purchasing and invoicing
 Enable receivable discounting
 Enable payments through AribaPay
 Post opportunities on Ariba Discovery
What incentives can I offer my
suppliers to encourage
participation in our strategic
initiative?

Questions
Alexander Graff
Head of Corporate Business,
Martin Meyer
Head of Business Strategy,
Bechtle
Austin Whitehead
SAP Ariba (SAP)

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